Estonians earn less on advertising

  • 1999-02-18
  • Kairi Kurm
TALLINN - Following a high increase in advertising turnover in 1996, the advertising boom is gradually slowing down, and Estonian companies predict smaller revenues this year.

The research conducted by BMF Gallup Media shows that in 1996 the advertising turnover increase was 45 percent, but last year it lowered to 26 percent.

Many say this slowdown is the result of stagnation in the economy, while some believe the advertising market has been hyperinflated and is actually shrinking to its normal size now.

"The advertising market has grown faster than the economy. This cannot last long. It should not grow much faster," said Kaido Raamat, commercial director at the Aripaev business newspaper which mostly sells business-to-business advertising.

Judging by 1998 results, most agencies predict a modest turnover this year. Last years' turnover of 710 million kroons ($51.3 million) hardly exceeded 1997 figures.

"Due to the general cooling of the economy our business advertising share dried up," Raamat said.

Advertising revenue comprised 78 percent, or 51.5 million kroons, of Aripaev's 1998 turnover.

"We hoped to earn more, but the turnover did not increase much compared to 1997," he said. "We are planning for the same amount this year."

Ulle Kink from the Artmiks advertising agency said the advertising turnover is small because the target group is small. In 1998, the advertising volume per capita was only 490 kroons which was two times less than the average in Europe.

The Gallup Media's research gives a breakdown of the Estonian advertising market in 1998. Newspapers had 47 percent of the market, followed by TV with 26 percent and magazines with 12 percent. Radio jingles took up 10 percent of the market, and outdoor stands and billboards had 6 percent.

The most advertised product was home hygiene (Procter & Gamble) on TV, mobile communications (Eesti Mobiiltelefon) in the print media, newspapers (Postimees) on radio, and mobile communications and drinks (Saku brewery) in outdoor advertising.

Procter & Gamble has been the top advertiser for the last three years, and it is also the top advertiser on Latvian and Lithuanian TV. The top advertisers in the print media in the other Baltic states are Varner Baltija in Latvia and Omnitel in Lithuania.

According to the Gallup Media research, companies make most of their turnover in the last quarter of the year, and there is a decrease at the beginning of the year.

According to Raamat, the decrease in advertising turnover at the beginning of the year is caused by the general slowdown in the economy after the Christmas season, which is followed by a rise in spring.

Advertising agencies will, however, enjoy some additional revenues before the March 7 election from various election campaigns.